ETF Update: 4 New Launches And 2 Closures

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Includes: AGN, CYBR, DFND, EEM, GARD, GNRX, HYG, IEF, IWM, LEAD, MLPL, MLPV, PJP, QQQ, ROVI, SHPG, SHV, SHY, SMCI, SPY, STT, TEVA, TLT, VOO, XITK
by: SA Editor Carolyn Pairitz

Summary

Every week, Seeking Alpha aggregates ETF updates in an effort to alert readers and contributors to changes in the market.

There were 4 ETF launches over the last 2 weeks and 2 closures from UBS.

Have a view on something that’s coming up or a new fund? Submit an article.

Welcome back to the SA ETF Update. My goal is to keep Seeking Alpha readers up to date on the ETF universe and to gain some visibility, both for the ETF community and for me as its editor (so users know who to approach with issues, article ideas, to become a contributor, etc.).

Every weekend, or every other weekend (depending on the reader response and submission volumes), we will highlight fund launches and closures for the week, as well as any news items that could impact ETF investors.

So far January has not been the best month for buy and hold investing. As a long-term investor I know stock dips are really opportunities to buy into strong companies that will not just recover but bloom again. However, even having studied behavioral portfolio management, I still get that flight response that all investors will feel at some time. As you can see in the fund flows YTD tables below, I am not the only person feeling this way.

Top Redemptions

Fund Name

Net Flows in USD Millions

SPDR S&P 500 Trust ETF (NYSEARCA:SPY)

-4,073.29

iShares Russell 2000 ETF (NYSEARCA:IWM)

-2,108.65

PowerShares QQQ Trust ETF (NASDAQ:QQQ)

-1,996.87

iShares iBoxx $ High Yield Corporate Bond ETF (NYSEARCA:HYG)

-1,648.93

iShares MSCI Emerging Markets ETF (NYSEARCA:EEM)

-1,349.74

Click to enlarge

Data Source: ETF.com

Top Creations

Fund Name

Net Flows in USD Millions

iShares Short Treasury Bond ETF (NYSEARCA:SHV)

1,984.62

Vanguard S&P 500 ETF (NYSEARCA:VOO)

1,537.21

iShares 20+ Year Treasury Bond ETF (NYSEARCA:TLT)

1,442.88

iShares 7-10 Year Treasury Bond ETF (NYSEARCA:IEF)

1,077.41

iShares 1-3 Year Treasury Bond ETF (NYSEARCA:SHY)

930.65

Click to enlarge

Data Source: ETF.com

Inflows and outflows can be a great reflection of what investors and money managers actually think is happening in the markets. As I don't offer investment advice, and none of my articles should be seen as advice, I will leave it to readers to decide what these data points mean in the comments section below. However, I do want to point out that most of the top new creations are Treasury ETFs, while the redemptions are funds tracking the popular U.S. equity indices. It is up to you to decide how (or if) this information from 3 weeks of market activity will affect your portfolio strategy.

Even with the churning markets there were 4 new funds launched in the last 2 weeks, so let's jump in:

Fund launches for the week of January 11th, 2016

  • Van Eck launches the first generic pharmaceuticals ETF (1/13): The Market Vectors Generic Drugs ETF (NASDAQ:GNRX) focuses on companies that make the majority of their revenues from generic medication. While there are other pharmaceutical ETFs available to investors, the largest being the Dynamic Pharmaceuticals ETF (NYSEARCA:PJP), GNRX is the first fund to highlight companies focused on the generic medication market. The fund currently holds 84 companies and the top holdings feature names biotech investors are likely already familiar with: Allergan Plc (NYSE:AGN) (8.69%), Teva Pharmaceutical (NASDAQ:TEVA) (8.60%) and Baxalta Inc. (BXLT) (5.83%).
  • Reality Shares launches 2 more DIVCON ETFs (1/14): Last week saw the launch of the Reality Shares DIVCON Leaders Dividend ETF (BATS:LEAD) and the company already has two more out of the gate. However, the Reality Shares DIVCON Dividend Defender ETF (BATS:DFND) and the Reality Shares DIVCON Dividend Guardian ETF (BATS:GARD) are both long/short portfolios, which is new for the firm. As a refresher, the DIVCON methodology "rates companies' dividend health based on seven weighted factors our research shows are correlated with dividend growth." According to each ETF's homepage, DFND seeks to provide long-term capital appreciation through the use of a hedged equity portfolio, while GARD provides exposure to large-cap U.S. companies with the highest probability of increasing their dividends, as measured by their DIVCON Scores. However, GARD has some twists as well. It dynamically adjusts its market exposure based on the firm's Guard Indicator market strength gauge, making it a much more complex fund.
  • State Street (NYSE:STT) rolls out its innovation ETF (1/14): The SPDR FactSet Innovative Technology ETF (NYSEARCA:XITK) tracks an index of companies selected by FactSet meant to represent the most innovative segments of the technology and electronic media industries. As described on the fund's homepage, "the Index Provider considers the most innovative segments of the Technology sector and Electronic Media sub-sector to be those with the highest revenue growth and believes that these companies are often involved in cutting edge research, innovative product and service development, disruptive business models, or a combination of these activities." Top holdings include Rovi Corporation (NASDAQ:ROVI) (2.22%), Super Micro Computer Inc. (NASDAQ:SMCI) (1.49%) and CyberArk Software Ltd. (NASDAQ:CYBR) (1.42%).

There were no fund launches for the week of January 18th, 2016

There were no fund closures for the week of January 11th, 2016

Fund closures for the week of January 18th, 2016

  • ETRACS 2xMonthly Leveraged S&P MLP Index ETN (NYSEARCA:MLPV)
  • UBS ETRACS 2x Leveraged Long Alerian MLP Infrastructure Index ETN (NYSEARCA:MLPL)

Have any other questions on ETFs or ETNs? Please comment below and I will try to clear things up.

As an author and editor I have found that constructive feedback is the best way to grow. What you would like to see discussed in the future? How can I improve this series to meet reader needs? Please share your thoughts on this first edition of the ETF Update series in the comments section below.

Have a view on something that's coming up or a new fund? Submit an article.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.